I've used food processor when I had to make latkes for 100 people, but never heard of using blender. For sure not the way you describe. Sounds Bad. Even using food processor is by far not the prefered method. The big hole cheese greated is the way to go. Sorry.

I prefer the food processor and the fine shredder for my latkes. They come out much more attractive than when I use the box grater. But I still squeeze out the excess moisture in a cotton tea towel so the latkes won't be watery.